Next from Gokongwei: Not A Mall, But A School
March 3, 2002 | 12:00am
Outstanding business and political leaders are usually conferred honorary degrees by schools, but the Ateneo de Manila University on March 1 made history by naming its prestigious undergraduate business school as the "John Gokongwei School of Management." Among the dignitaries who witnessed the event at the university’s Rev. Henry Lee Irwin Theater were Education Secretary Raul Roco, former Bangko Sentral Governor Gabriel "Gabby" Singson, prominent Jesuit priests, top Ateneo officials, diplomats, business executives, bankers, the Ateneo Board of Trustees led by its chairman, banker Octavio Espiritu, SGV Group founder Washington SyCip (whose late father Dr. Albino SyCip of China Bank had granted the young Gokongwei his first loan of P500,000 in 1957), Federation of Filipino-Chinese Chambers of Commerce & Industry, Inc. (FFCCCII) honorary president Jimmy Tang, Atenean and top banker Edward Go, and others.
The ceremony included the unveiling of the marker for the John Gokongwei School of Management Building, now under construction and set for completion in mid-July this year. The Ateneo College Glee Club, conducted by Prof. Ramon Acoymo, performed three songs by Allan Pate, John Bennett and Nicanor Abelardo. Ateneo officials and Gokongwei family members gave speeches, and a luncheon reception followed at the Ateneo Grade School auditorium.
A few days before this event, the "rags-to-riches" taipan gave a two-hour interview to the Philippine STAR in his home. Though eloquent and frank in his replies, Gokongwei parried questions on politics and other controversial topics with good humor and witty off-the-record comments. Already retired, he attends only the weekly Excom meetings, gives advices to younger brother James and son Lance on major deals, but talking about the innovative new cell phone venture of Digitel this year excites him a lot. The cell phone is his group’s big new challenge, for the industry is already under the tight control of giant conglomerates Globe Telecom of the Zobel-Ayala clan and Smart/PLDT of the Hong Kong-based First Pacific/Salim Group.
When asked about his new role as chairman emeritus of the JG Summit Group of 30 corporations with 30,000 employees, Gokongwei allowed this writer to browse a 125-page file marked "Confidential" and prepared by the world-famous McKinsey consultant firm of the US Titled "Master Authority Limits Matrix," it was a detailed outline which defined the powers and responsibilities of the JG Summit corporate leaders.
Ateneo vice-president Fr. Carmelo Caluag II, S.J. said that they initially approached the Gokongwei family for a P1 Million donation for a professorial chair, but was pleasantly surprised when James Go and Lance Gokongwei offered much more. He recalled Lance saying that P1 Million was too small, that the family wants to honor their patriarch with something "that will have a big impact on the country and the Asian region." James Go said that hopefully, their donation will set an example for other families to support worthy philanthropic causes.
Father Nebres said: "This is the biggest donation to the Ateneo in its 142-year history. We are very pleased, because the support will enable us to build a stronger School of Management and Mr. Gokongwei is a business leader with an inspiring career as a pioneer. We hope the success of Mr. Gokongwei would show the younger generation the importance of hard work, of entrepreneurship and of being focused."
Philippine STAR: Aside from Ateneo, what other schools has your family supported?
John Gokongwei Jr.: We donated the Information Technology building of De La Salle University, a building for the Sacred Heart School in Cebu and a building for Xavier School.
Some business people say your reputation for frugality is legendary, that you are a Chinese Jew. Can you comment?
(Laughs) What can I do? Maybe I don’t spend on myself, but I spend for the community. Our family supports philanthropic causes, such as the P20 Million every year we spend on the Children’s Library project and the P20 Million yearly we spend on our technical school.
What do you consider the happiest moments in your life?
There are three – when I married my wife Elizabeth Yu in 1957, when my children were born, and third is this honor from the Ateneo.
Your retirement this year is an important event. What position will you hold in JG Summit Holdings?
I’m the Chairman Emeritus.
Is it like Lee Kuan Yew’s role in Singapore, something like a Senior Minister?
(Laughs) Yes, something like Lee Kuan Yew’s position. I’m a member of the Executive Committee (Excom). I don’t have to go to the office anymore. I only attend our once-a-week meeting which usually takes the whole afternoon. And although I no longer go to work everyday, I live just upstairs from the office(laughs).
Who are the members of your Excom?
Me and my brothers James and Johnson.
Anyone else attending your Excom meetings?
My daughter Robina and my nephew Deck (Frederick).
I heard you will now have more time for travel. What places do you plan to visit?
Many. I hope to visit Xinjiang province in China’s northwest, as well as Mongolia. I want to track the ancient Silk Road from Europe to Central Asia to China. I’d like to ride the Orient Express train route from Europe to Shanghai or Beijing.
Any other places?
I’ve already been to North America, South America and Western Europe. I visited Eastern Europe once, at the start of the revolution following the collapse of communism. I’d like to go back to the former Yugoslavia, to Poland, Hungary, Czech Republic and others because they have interesting histories.
What about the Middle East, Israel?
Yes, I want to travel to the Middle East, but not today, with all their wars. I’d like to see Jerusalem. You know, the lady ambassador of Israel recently visited me here.
Do you think the Jewish people are the world’s best entrepreneurs?
The Jewish people are very good entrepreneurs. I think the Chinese entrepreneurs are more like the Jews, or the Italians, because we attach great importance to family, clan and tradition. This makes us different from the Anglo-Saxon entrepreneurs.
You used to spend two months every year traveling, to learn about new businesses. What is your favorite place?
To learn business, the best place to visit is America. It is the source of many new technologies and new ideas. But we Asians cannot adopt everything American, only those that we need and which would work here in our part of the world. If we try to copy everything American, our business will die.
You enjoy reading biographies. Who are the leaders in history whom you admire the most?
I know this might not be popular with most people, but I admire Genghis Khan a lot. Also Alexander the Great, Mohammed, Julius Caesar and those other guys who moved the world.
I know that you love the book Gone With the Wind. Is it because the main character Rhett Butler is a trader like you?
(Laughs) Yes, I love that book. I read it when I was 15 years old. I read the whole novel. During that time, I was trading between Cebu and Manila, riding batel boats. Butler is a great character, he loved and romanced a lot of women and he made his own money.
Some taipans have several wives due perhaps to the feudal traditions of the past. Even Lucio Tan jokingly told me that he has to ask his accountant when I asked how many wives he had. Do you disapprove of this?
(Laughs) I do not want to make moral judgements on others. Everyone has his own unique situation. Maybe some taipans think they are like the emperors of ancient China, who had many wives and concubines. The British royalty of the past, the kings of Europe also had various wives, even the moguls of India.
The media has reported increased rivalry between Cebu Pacific which your family owns, and Philippine Airlines which is Lucio Tan’s. What’s the competition like?
You know, 50 years ago when I was just starting with a corn starch manufacturing business, Lucio Tan was my competitor. Eventually, he sold Royal Corn to me. I think if not for that, Tan would not have gone into cigarette manufacturing and become the biggest there. The competition in airlines – it’s not between me and Lucio, it’s between my son Lance and him. Lance is the chief executive officer of Cebu Pacific, he’s the boss there, and I’m happy he has been doing a good job with that airline. He’s giving the riding public very competitive prices. Cebu Pacific is always on time.
How do your Robinsons malls rank vis-a-vis your competitor Henry Sy’s SM Group?
I think we’re Number 2 right now, though I’m not sure about the exact figures. We continue our aggressive expansion. In fact, we’re expanding as fast as Henry, although he has a bigger base to start with.
What is your rate of expansion? How many malls will you build over what period of time?
We’ll build 10 new malls in the next 18 months all over the Philippines.
The Philippine economy is not in the best shape, why this bullish expansion now?
The economy goes through cycles. I believe if you have faith and you build, then you’ll be ready when the Philippine economy regains its robust condition and starts to grow.
Your telecom firm Digitel is reportedly planning the grand launch of your cellular phone service. Don’t you think the market is already saturated, with major players Globe Telecom of the Zobel-Ayala clan and the Smart/PLDT group?
No, I don’t think the market is saturated. More competition is beneficial for the public. Digitel plans to start our cellphone business in March. The launch will be in June, but the grand launch will be in October. Let’s put it this way, everybody in the telecom business has put up landlines. Digitel is now Number 2 to PLDT in terms of landlines. In Luzon, we’re already the biggest, with over 400,000 paying lines.
Do you have a name for your new cellular phone service?
No name yet. We are bullish about our new cellphone business. We have a very good marketing plan.
Bangko Sentral Governor Rafael Buenaventura said you were classmates in an MBA course in La Salle. He also said that both of you were born in the Chinese astrological sign of the tiger. But he is a water tiger while you are a fire tiger which makes you "more ferocious."
(Laughs) Yes, Paeng is 12 years younger than me. We were classmates in La Salle in 1960, then I took management courses in Harvard in 1972.
Buenaventura said you were already a street-smart businessman then. In retrospect, did you really need all those MBA classes?
Yes, I thought I needed an MBA education. From those classes in La Salle and Harvard, I learned to think more about the world, not just the narrow confines of my day-to-day business operations. I began to ponder more about the far-reaching implications of world and national events. Those classes widened my perspective. These classes also helped change my management style. Before, I did not like to delegate authority to others, but then I realized that there are a lot of people who are honest and competent enough to help you achieve your objectives.
Your La Salle professors then were future Finance Secretary and Prime Minister Cesar Virata, Board of Investments (BOI) chief Edgardo Tordesillas, Sen. and Trade Sec. Vicente Paterno. What did they teach, and how do you rate them as teachers?
I liked these professors, they were very good. Virata was professor in general management, Tordesillas in financial management and Paterno in production management. I started at age 34 then.
Despite having professors who became technocrats in the martial law regime of the late President Marcos, you have gained a reputation for not using political connections for your businesses. How did you manage this?
I just avoided politics, even during the martial law years.
Many, even among the so-called "old rich" families, used political influence to build their fortunes. Why did you avoid politics in building your empire?
I always think that in the end, mixing politics with business is not good. You don’t really get anything. Maybe in the short-term, there will be some advantages, but that guy is not going to stay in power forever. Politics – it’s just not my cup of tea.
Now that President Estrada is no longer in power, can you finally comment on the controversy regarding his public anger against you because of corruption allegations made by your former newspaper The Manila Times?
That happened under my daughter Robina – she was the one in charge of Manila Times then. The President took this newspaper report as an intentional insult against him. But my daughter really had no such intention. Our family does not get involved in politics. Even at a financial loss, we eventually decided to sell the newspaper.
Your father died when you were almost 13 years old. Hong Kong’s richest billionaire Li Ka Shing was also a poor 12-year-old when his father died. Did this adversity help motivate your intense drive for success?
I had read about Li and his hard life as a youth. In my case, I was already striving for the highest grades in school since childhood. I was always the topnotcher in class, I never settled for second place. I think going to school and going into business are similar. I always had this drive to achieve my dreams.
Your children seem to have inherited a lot of your traits. What kind of training did you give them?
Yes, I think my son’s academic record is unique in the Philippines. He graduated with double summa cum laude honors and with perfect grades in two courses from Wharton. Our children did not get any special training. We just let them roam around the library and read all kinds of books. I love to read. I have many books. But you should see the books of Lisa in her room. She’s got more books and magazines than I do.
What makes a business group successful in the Philippines?
To me, what’s most important is how long the business group will last when the founder is no longer around. That’s why in JG Summit Holdings, we have institutionalized a clear line of succession – to secure the future. You know, we were once a big family business during my great-grandfather’s time, then all that was lost. Planning for the future is crucial.
Why did you choose James Go, your youngest brother, to succeed you, as the head of your group?
Because he is the ideal person to manage, he is not too old, and he is very qualified. My younger brother Johnson is already 68 years old and will also retire soon. He told me he also wants to take a rest.
Is JG Summit in the process of becoming a multinational? How extensive are your foreign businesses?
We’re now the only ASEAN business group in branded food products which does business in almost all ASEAN countries, China and Hong Kong. We’re going to Vietnam. We’re exporting to India, Taiwan, South Korea and other Asian countries. We are also starting to export to the US and Europe.
When did you really start this move to do business overseas? Why?
We started four or five years ago. Now we’re steadily building up our foreign businesses. With the ASEAN Free Trade Area (AFTA) and the World Trade Organization (WTO), your business will collapse if you do not adjust to changing conditions and compete internationally. If you don’t compete globally, you’d be totally squeezed out of existence (laughs).
San Miguel has also invested in a few Asian countries.
Yes, San Miguel has investments in China, Hong Kong, Indonesia, and maybe Vietnam too.
Based on my research, the late President Sergio Osmeña was the half-brother of your grandfather, that he was the son of your immigrant great-grandfather Pedro Lee Gotiaoco. Can you confirm this?
I cannot comment on that. I’m not in a position to talk about it. But one thing I am very certain, based on old company records of the family, Gotiaco supported the education of the young Sergio Osmeña, who was brilliant.
What do you think is the legacy of President Osmeña in Philippine history?
He was a very gifted leader, a true statesman. He was very compassionate and he served the Filipino nation well. President Osmeña was a man of integrity.
I heard that Osmeña was the most honest of all our past Presidents.
President Diosdado Macapagal was also very honest.
Your great-grandfather Pedro Gotiaoco was remarkable. He is also the father of the late Modesta Gaisano of the famous retail clan, and his brother was the grandfather of Filinvest Group chairman Andrew Gotianun.
Gotiaoco was the largest taxpayer in Cebu during the Spanish colonial era. He also won the election as leader of the Chinese community in Cebu with the position of "Capitan." He was like Manila’s Chinese community leader during the Spanish era, Carlos Palanca Tan Quien Sien.
It’s interesting that your relatives, the Gaisanos, are your competitors in shopping malls, and the Gotianuns are in real estate. What traits do you all share?
We’re not really rivals. . . maybe the Gaisanos in the retail industry. The Gaisanos and Gotianuns – they definitely have the drive. The Gaisanos are good in retail. I don’t know about our similarities, I have never really thought about it.
What reforms are needed to make the country truly competitive?
I have my ideas and personal opinions, but at this stage of my life, I just want to relax. I don’t like to provoke any controversies. I do have suggestions for our leaders: Try to make the country more efficient. Look at China. When the late leader Deng Xiaoping announced 20 years ago that they wanted to "get rich," bold reforms transformed that nation. Here in the Philippines, we’ve had many advantages, we have been an independent country for 50 years, but I am sad that we wasted many opportunities...The only thing I can suggest is that we all work together to make the country more efficient. Let the economists, the government planners and business community leaders come up with comprehensive measures which can make the economy more efficient so that we can compete in this totally changed environment.
In what areas can the Philippine economy be globally competitive?
I believe there are two areas where the Philippines can be competitive. The first is tourism, but we have to improve the over-all peace and order situation. The second is agriculture, but there are reforms that should be undertaken here. I’m not a politician, so I will refrain from further comments. All sectors of Philippine society must act to make the country competitive, I am sad when I realize how many opportunities we have wasted in the last 50 years.
Assess our past Presidents Marcos, Aquino, Ramos and Estrada. How did they fare as leaders of the country?
I prefer not to comment on political matters. I just want to relax.
What do you think was the biggest mistake of Erap as a leader?
I prefer to keep my political opinions to myself.
If the Philippines were a corporation, how would you assess it? What type of chief executive officer do we need?
One thing I can tell you for sure, a damn good manager is Singaporean statesman Lee Kuan Yew. He would make a good CEO of any business group or corporation. Look at the way he ran Singapore. He is a great leader. He is efficient. Lee himself relinquished power, which is very rare in Asia. Another Asian leader I admire was the late President Chiang Ching Kuo of Taiwan, he had authoritarian powers and modernized the Taiwan economy, but he did not die a rich man. His allies even had to raise funds to help his widow.
What is your assessment of President Gloria M. Arroyo’s style of leadership?
In my opinion, President Gloria Arroyo is doing a good job.
What aspects of her governance should be more appreciated?
Her creating a better climate for people to invest again in the Philippines. This is very critical. President Gloria Arroyo knows what the economic climate is all about, and she’s doing something about it.
If you understand the economic environment and work hard to solve the country’s problems, that’s half-the-job done already.
When do you foresee the economic recovery of the Philippines? Of America? Any fearless forecasts?
I think we shall have a slight recovery this year, with a stronger and more robust economic recovery next year. I am optimistic about the future.
Perhaps you should be an economic adviser to the government?
No politics for me. I’m already 75 years old. I just want to rest.
By East Asian standards you are still young. Deng Xiaoping was already in his 70s when he initiated bold economic and social reforms in China.
Yes, he was in his 70s when he reformed his country completely. Deng was an amazing leader with a vision. He changed the way business and the whole economy were being run.
What is the biggest crisis in your career as an entrepreneur?
Every business is a constant and unending challenge. The biggest crisis, I think was when I was starting my first business with nothing in my pocket. There’s a Chinese saying about this situation. I was a start-up entrepreneur with no merchandise, no people and no capital – that period to me was the most difficult.
How important is luck or destiny in business success?
I disagree with people who say that luck is 100 percent the reason for business success. If this were true, then they should try it. I think that 90 percent of business success is created by three essential factors: planning, capital and management. Everything else is 10 percent.
How do you maintain your health?
That’s how (points to the treadmill near his study). I do about two miles or 40 minutes every day. I used to swim a lot, but since I now live in a condominium, I get to swim only once a week.
You have led an exciting life, a rags-to-riches business career. Now that you’re a philanthropist and grandfather, what else do you wish to achieve?
(Smiles) An ancient Chinese proverb said that a man should plant a tree, sire a son and write a book. I’ve planted trees, created enterprises, I have wonderful children and a good wife, and now a school has been named in my honor. What else would I need?
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